Database : Green Your Data Management

Making the business case for direct mail waste reduction

October 2008 By Jeff Zabin

multipage

One emerging trend, called transpromo, represents a confluence of customer data management and technology around digital variable print processes. Marketing materials that previously would have traveled in a separate mailer can now be placed onto a transactional document, such as a billing statement (usually by spraying the message as a billboard inside the bill rather than adding a paper insert).

Piggybacking on a communications vehicle that has a nearly 100 percent open rate enables marketers to not only save money, but also send more intelligent cross-sell and upsell promotions to existing customers while improving the likelihood that their messages will be read. Here, again, the benefits of merging two distinct communication streams into one envelope are obvious from a green marketing perspective.

Everybody Wins
By investing in improvements in data quality, companies can achieve higher cross-sell/upsell potential. A recent Aberdeen Group survey of 125 diverse enterprises revealed that 77 percent of best-in-class companies, compared with only 3 percent of laggards, improved their year-over-year performance in cross-sell/upsell effectiveness as a result of improved customer data quality practices.

Dramatically reducing the amount of untargeted and returned mail also can result in substantial costs savings, given the high price of paper, printing and postage. What's more, by correcting an address, companies not only ensure deliverability of their customer communications, but also maximize their postal discounts.

All of these business benefits aside, the most compelling reason to embrace direct mail waste reduction is because that's exactly what a growing number of customers want.

"Customers really want to believe that you're targeting and not wasting," says Steve Fuller, senior vice president of corporate marketing at L.L.Bean, the $1.5 billion catalog mail-order and retail store merchant of outdoor clothing. "They trust that you're doing the right thing. And companies have that responsibility to their customers."

For its part, according to Fuller, L.L.Bean has a whole department dedicated to data hygiene. "We actively look for ways to combine households to reduce duplicates and avoid mailing to nonresponders."

So, too, does the largest retailer of them all. "We actively update customer profile information to ensure that folks that don't want to receive print communications don't receive print communications," says Wal-Mart's Halligan. "Data hygiene is a core part of our marketing activities, such that we try not to send any customer anything that he or she doesn't want. We place a high degree of importance on the integrity of customer information. We want to communicate with customers in a relevant and compelling way."

Best Buy, one of the world's largest consumer electronics retailers, is also working to make its direct mail communications increasingly relevant. This means moving away from broad-based promotion tactics - for example, sending all customers a coupon for 10 percent off their next purchase - and toward event-triggered incentive programs and precision marketing, based on customers' past purchase behaviors, geo-demographic and psychographic characteristics, and value to the brand.

"The intention is to be able to offer up only content that we know is going to resonate with the consumer," says Matt Smith, VP of customer insight at Best Buy. "We're undergoing a transformation - from mass print to targeted print, from targeted print to targeted push electronic, and from targeted push electronic to opt-in pull electronic." According to Smith, marketing waste reduction is a by-product of that transformation.

Wal-Mart, L.L.Bean and Best Buy are just a few of the marketers who recognize the dual benefit of helping shareholders achieve their financial objectives while mitigating the impact of their direct mail activities on the environment. These companies don't look at direct mail waste reduction as merely "a feel-good thing" or "a PR thing." Rather, they view it as an area where environmental concerns and shareholder interests coincide and where everybody can win.

Jeff Zabin is a research fellow at Aberdeen Group. His research focuses on data-driven marketing solutions for attracting, retaining and leveraging profitable customers. He has written extensively about the value of customer data in the context of direct mail waste reduction. Other areas of interest include social media monitoring, mobile marketing, customer feedback management and digital signage. Zabin is the co-author of two best-selling business books: "The Seven Steps to Nirvana" and "Precision Marketing." He can be reached at jeff.zabin@aberdeen.com or (847) 328-4795.

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